New York City schools that have long sent out report cards will soon be getting a grade of their own.

Starting next year, city schools will be awarded an A, B, C, D, or F based in part on how students progress from one year to the next, the city’s schools chancellor, Joel Klein, announced yesterday.

The grade will be part of an annual report card issued to each school as part of the Department of Education’s push to monitor improvements at individual schools.

“This system holds promise for real transformation of the way we do business in public education,” Mr. Klein said at a news conference at Tweed Courthouse yesterday. He said that he hoped that the city’s new system would become the “national model.”

As a reward, high-scoring schools will receive additional money and more decision-making ability. On the other hand, schools with chronically low grades will face restructuring or could ultimately be shut down, Mr. Klein said.

The city’s schools will be divided into groups based on the enrollment of low-income, black and Hispanic, special education, and English as a second language students. Each school will be given a grade based on a comparison to other schools in the group.

For example, schools like Stuyvesant and Bronx Science will be evaluated against each other and not against schools with a large number of special education students.

Under the new system, the education department will track individual students instead of comparing a grade of students from one year to the next as it does now. For example, it will look at a student’s progress to fourth from third grade instead of comparing students in fourth grade this year to students in fourth grade last year.

“No longer do you have to look at a snapshot,” Mr. Klein said, “You’ll be able to look at a moving picture.”

In recent years, education analysts across the country have been examining what they call a “value-added” system for tracking student progress similar to what Mr. Klein is proposing, although New York could become the first district to actually implement it.

“Value-added methodologies are probably the best way of estimating growth in student achievement because you’re looking at the gains in performance of the same students over time,” the director of the Center for Research on Teaching and Learning at New York University’s School of Education, Robert Tobias, said.

In order to monitor progress, the education department will administer a new test to students every six to eight weeks. The tests initially will be given in English and math and will later expand to additional subjects.

Mr. Klein said the results would also help teachers highlight problem areas for each student.

Several factors will go into determining a school’s report card grade, including standardized test scores, individual student progress, and the overall school environment, which is based on things like attendance and surveys filled out by parents, teachers, and students.

As many as 200 schools will participate in a pilot program in the 2006-07 school year to test the grading system. Those schools will have letter grades by spring 2007. All schools will have a letter grade by September of 2007.

Mr. Klein estimated that the new measures will cost about $20 million to $25 million.

The changes announced yesterday raised the ire of officials at the unions representing the city’s schoolteachers and principals.

“We are disappointed that teachers who are in the classrooms working with kids every day were not involved in the planning process,” the president of the United Federation of Teachers, Randi Weingarten, said. “Over the course of the next year it will be critical for teachers to have a voice in the plan’s implementation – and that’s presumably why the system included a teacher survey.”

The president of the Council of School Supervisors and Administrators, Jill Levy, said giving a school a letter grade is misleading to parents because it tries to give a simple answer to a complicated question.

In addition to the report card, every school will receive a five-page quality review conducted by Cambridge Education, a company based in England that evaluates schools throughout the world.

Each school will receive a quality grade of “well developed,” “proficient,” or “undeveloped.” Both the quality grade and overall grade will be posted on the education department’s Web site.

Mr. Klein asked parents with questions about the reforms to e-mail childrenfirst@nycboe.net.

The Department of Education already makes reports on individual schools available on its Web site. The reports tell about attendance at the schools and results on standardized tests and make some comparisons to other schools with similar student populations, but they do not include letter grades summarizing the schools’ performance.